Financing Overview

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Entrepreneurs have many options when raising funds for their startup including debt, equity and/or other types of financing. When it comes to deciding what type of funding to go after, there are no right answers. Every entrepreneur must determine what type of financing is right for them and their business. Some questions to help you make this decision include:

1. Are your needs short or long term?

2. How quickly will you be able to pay back the loan or provide return on the investment?

3. Is the money for operating expenses or capital expenditures (items that will become assets)?

4. Do you need the money upfront or in smaller pieces over time?

5. Are you willing to assume all of the risk if the business does not success, or would you like to share this risk with investors?

Financing Types

1. Debt Financing: For a startup business, debt usually comes from SBA Loans, microloan programs, private lending, personal credit cards or friends and family.

2. Equity Financing: If you decide to pursue equity financing, there are angel investors, venture capital firms, and friends and family.

3. Alternative Financing Methods: There are other methods of raising money including Bartering and Grants.